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Power Division Clarifies Misreports on Fixed Tax for Solar Panel Installation

The Power Division has dismissed reports suggesting the imposition of a fixed tax on domestic and commercial solar panel installations. However, a statement issued by the Power Division on Saturday inadvertently confirmed the government’s plan to decrease the net metering buyback tariff for residential and commercial consumers with solar systems.

On Friday, reports surfaced claiming that the Central Power Purchasing Agency (CPPA) had recommended imposing taxes on individuals and businesses installing solar panels, with a proposal forwarded to the Ministry of Energy. According to ministry sources cited in the reports, homeowners or businesses installing solar panels could face a charge of Rs2,000 per kilowatt, translating to Rs24,000 for a 12-kilowatt system.

Many users opt for 12 kWh solar systems to eliminate their electricity bills entirely.

However, a Power Division spokesperson issued a statement on Saturday refuting the reports of a fixed tax on solar panel installation. The spokesperson clarified that no such proposal had been submitted to the government, denying the existence of fixed taxes.

Nevertheless, the Power Division’s spokesperson acknowledged in the statement that the increasing adoption of solar panels by affluent consumers is adversely impacting underprivileged consumers. The statement warned that if this trend persists, there could be a Rs3.35 per unit hike in electricity rates for low-income consumers.

The statement stressed the necessity of revising the net metering tariff following a significant uptick in solar installations.

It’s important to note that Business Recorder reported two days ago that the government is contemplating reducing net metering rates for solar panel buyers. Presently, solar panel owners sell electricity to distribution companies at Rs21 per kWh through net metering. The government aims to slash this rate to Rs10.

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